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Shopping Success Soothes Greenfield Troubles
Greenfield Online, Inc. has reported first quarter results, with rapid growth for its Comparison Shopping business - up 60.3% year-on-year to $10.8m - masking a 3% decline for its Internet survey solutions segment. Greenfield has also agreed in principle to settle a pending class action lawsuit regarding 'false and misleading' projections.
The decline in the survey business, to revenue of $20.1m, would have looked steeper but for favorable currency effects. With the comparison shopping business added in, the company's total net revenue was $30.9m, up 12.6% - currency effects accounted for c.5.7 points of this. Total gross profit was $24.1m or 78.0% of revenues, up from $20.3m or 74.0% of revenues in Q1 2007.
Operating loss was $1.1m or 3.4% of revenue, vs income of $3.0m or 11.0% of revenue in Q1 2007: however, pro forma income was $3.8m or 12.3% of revenue. This figure excludes charges related to the Audit Committee investigation of $2.9m and the proposed litigation settlement charge of $2.0m, but includes class action litigation expenses of $0.2m. Similarly, reported net loss for the quarter was $0.1m, from $2.0m net profit in Q1 2007, but the pro forma figure for the latest quarter, after the same exclusions, was $2.8m profit.
The company, which admitted in March that certain company employees had engaged in 'inappropriate activity', now says it has 'determined that it is beneficial to enter into the proposed settlement in order to avoid costly and time consuming litigation'. Settlement terms contain no admission of any liability or wrongdoing on the part of any defendant, and are subject to court and other approvals. The company has also agreed to adopt certain enhancements to its corporate governance policies and procedures.
CEO and President Al Angrisani put the good overall quarterly figures down to 'the strength of our global footprint and diversified business model' but acknowledged: 'the Internet survey solutions business got off to a slower than expected start'.
The company confirmed previous revenue guidance for the full fiscal year 2008, and amended other guidance only slightly, 'though excluding the effect of the settlement charge.
Full results are on the company's web site at www.greenfieldonline.com .
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